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October 25, 2010

Rakuten Claims Yahoo Japan-Google Partnership is Anti-Competitive
By Mae Kowalke
TMCnet Contributor

This past July, Yahoo Japan rolled out a new service that makes use of Google’s (News - Alert) search and advertising technology. This partnership is apparently rubbing some other Japanese businesses the wrong way, raising concerns about anti-competitive behavior on the part of both companies.

Tribune Information Services reported last Wednesday that Japanese online retailer Rakuten, Inc., asked Japan’s anti-monopoly watchdog to review the Google-Yahoo partnership to determine if the companies are acting unlawfully.

“The tie-up between the two companies would lead to Google monopolizing information,” Tribute Information Services quoted Rakuten as saying.

Rakuten added that the partnership stifles “the development and growth of not only Internet search engines but also many Internet-related services in the country.”

According to Tribune Information Services, the Yahoo-Google partnership is also being criticized by Microsoft (News - Alert).

At issue is the fact that Yahoo! Japan dominates more than 50 percent of Japan’s Internet search services market, while Google ties up another 40 percent. (Figures from Japanese research firm Video Research Interactive and Kyodo News.) The Associated Press (News - Alert) pointed out in a report that Google also dominates the internet search market worldwide.

“It generates income by charging advertisers to display links along with search results,” the AP said in its report. “Few companies have the technology, user base and funds required to compete in search.”

So far, the Japan Fair Trade Commission has no plans to take up the issue, since Yahoo and Google ostensibly offer and market their internet search services separately, even if they are using the same technologies.

All this talk about possible anti-competitive behavior does not seem to have had much negative impact on stock prices of the companies involved. Yahoo Japan Corp. (YAHOF.PK) stocks were listed Friday afternoon (Japanese Standard Time) at 28,040 Japanese Yen ($344.30), down 80 Yen ($0.98).

Meanwhile, Rakuten, Inc. (RKUNF.PK) stock prices closed Friday at 60,900 Japanese Yen ($747.79), up 0.16 percent. And, Google’s (GOOG) stocks closed Friday at $612.53, up 0.09 percent.  

Mae Kowalke is a TMCnet contributor. She is Manager of Stories at Neundorfer, Inc., a cleantech company in Northeast Ohio. She has more than 10 years experience in journalism, marketing and communications, and has a passion for new tech gadgets. She holds a bachelor's degree in communications from Thomas Edison State College. To read more of her articles, please visit her columnist page. She also blogs for TMCnet here.

Edited by Tammy Wolf


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